U.S. Supreme Court Ponders Patent Rules

When it came time to discuss the legal standard for patents, U.S. Supreme Court Justice Antonin Scalia did not mince words.

"This is gobbledygook. It really is, its irrational," he said.

And so went a hearing in which several of the justices attacked the legal standards used to judge patents the Federal Circuit Court of Appeals has followed for the past 20 years.

The case centers on a dispute between KSR and Teleflex. KSR, a Canadian manufacturer, was sued in 2002 by Teleflex after Teleflex claimed the company violated one of its patents by combining two existing inventionsan adjustable pedal and an electronic throttle control.

Though a federal district court ruled Teleflexs patent was invalid because it was "obvious," the appeals court overturned the decision.

KSR appealed the decision to the Supreme Court, arguing that the appeals court standard is out of step with Supreme Court rulings on patents.

Section 103 of the U.S. patent law prohibits issuing a patent for any invention that would have been "obvious" at the time of "invention" to a person of "ordinary skill in the art."

In addition, the federal circuit developed a "motivation to combine" test where anyone seeking to invalidate a patent on grounds it simply combined prior inventions must prove there was already a "teaching, suggestion or motivation to put those earlier inventions together.

And therein lies the rub.

Patent attorney Mark Lemley said the Supreme Court seems to be leaning toward making a change.

Lemley is a law professor at Stanford University and filed an amicus brief in support of eBay in its patent case against MercExchange.

"The Supreme Court for a long time got out of patent law," he said, noting the court has taken on six patent cases this year. Thats more cases in a single year than any time since the 1960s, he said.

Attorney Stephen Akerley also agreed that could mean a change is in the works.

"I would not be surprised at all," said Akerley, an attorney for the international law firm McDermott Will & Emery.

The case has attracted more than a few curious onlookers.

A number of companies on both sides of the case have filed amicus curiae briefs, with computer industry giants such as Microsoft and Intel calling for changes to the patent rules.

However, companies such as General Electric and Dupont have filed briefs arguing against any reforms and claim the current test has both protected and spurred innovation.

The case is of particular concern to tech companies who fear so-called patent trollscompanies that enforce patent rights against accused infringers but do not manufacture products or supply services based on the patents.

But discarding the federal circuit standards may not have the effect some are predicting, said Morgan Chu, an attorney with the Los Angeles firm Irella & Manella.

He argued that changing the standard may not lead to more summary judgments because both sides in a patent case will simply provide competing experts to testify about the issue of obviousness and a judge will simply send the case to a jury.

He agreed however a change would make patents somewhat more difficult to get and easier for a defendant to attack on obviousness grounds.

"Its a change, but its not this huge tidal wave [some are predicting]," Chu said.

However, patent attorney William Atkins had a different take.

"If you change this TSM, this rubric, you are going to affect a lot of patents," said Atkins, an attorney with the Virginia law firm Pillsbury Winthrop Shaw Pittman.

During the hearing, Justice David Souter asked what impact the ruling would have.

"If we see it your way," Souter asked an attorney arguing in support of KSR, "are there going to be 100,000 cases filed tomorrow morning?"

Scalia and Chief Justice John Roberts meanwhile showed no shortage of adjectives to deride the appeals court test, which Roberts called "a layer of Federal Circuit jargon."

Justices Kennedy and Ruth Bader Ginsburg suggested that the test could be one way to determine obviousness but should not be used exclusively.

But Thomas Goldstein, attorney for Teleflex, said the standard the Federal Circuit Court of Appeals established should be honored.

"What I dont think there is much debate about is whether a properly applied test that the Federal Circuit has articulated strikes the right balance," he said.

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